Back to the drawing board, as city addresses $5.16M shortfall

Published: Wednesday, July 10, 2013 at 6:10 p.m.

Last Modified: Wednesday, July 10, 2013 at 6:10 p.m.

The Ocala City Council on Tuesday told city staff to find another way to reduce the $5.16 million shortfall in the preliminary $83.8 million 2013-14 general fund budget, which is used to pay for general operations of the city.

Council members rejected the four strategies the staff proposed to close the gap between revenue and expenses. The four plans call for taking a range of $2.8 million to $5.2 million from reserves for contingencies, which is money set aside for problems that arise, such as hurricanes. Three of the proposed strategies also call for taking money, ranging from $1.3 million to $2.4 million, from the fire and police 1/4-mill fund that is used to buy equipment. In addition, one of the four strategies calls for increasing a transfer of money from the sanitation department by an additional $250,000, bringing the total sanitation transfer to $1 million.

Council offered no direction other than to say it wants some police cars and a fire pumper truck that had been cut restored to the budget. That would reduce the transfer proposed to be used to balance the general fund budget.

The preliminary general fund budget presented at Tuesday's council workshop meeting shows flat revenues. Property values in the city are down 0.25 percent.

"We had double digits for several years," said Cindy Kelley, the city's deputy director of budget and finance. "It's getting better."

The city's total revenues are projected to be $61.81 million and total expenses $66.97 million, leaving a $5.16 million shortfall. The estimated $22 million cash balance brings the total general fund budget to $83.8 million.

"About half our increase is salaries and benefits," Kelley said Wednesday about expenses.

The General Employees Pension Plan obligations have increased to 53 percent of payroll, up from the current 42 percent of payroll, Kelley said.

Police Chief Greg Graham told the council that his fleet of vehicles is aging and said he recently went out on a shift and drove an older car.

"It scared the hell out of me," Graham said.

Money that was supposed to be set aside for emergency vehicles in the past has been tapped in recent years to balance the general fund.

"How much do you invest in public services versus public safety?" asked Councilman Daniel Owen, referring to choosing between funding services such as trash pickup or public safety, like police and fire.

Staff had cut four police cars and one fire pumper from the budget in order to close the general fund deficit. An additional 13 police cars, two light fire rescue trucks and one fire pumper were approved, however.

"In essence, we now gave them everything they asked for," Kelley said.

Built into the proposed general fund budget are a small number of fee increases and a one-time payout of $504,340 in bonuses for employees. Full-time employees each will receive $500 and part-time employees will receive $250. The money will come from a $593,671 reduction in insurance premiums. After the bonuses are paid, there still would be an $89,331 overall savings in insurance premiums.

"That's why we went ahead and did that — give the employees a little bit of something," Kelley said.

Two full-time employees will be added to the general fund budget and one part-time employee will be upgraded to full time. They are in addition to the 11 other full-time employees and seven part-time employees being added to the total budget.

City Manager Matthew Brower told the council he is down 12 employees due to attrition.

<p>The Ocala City Council on Tuesday told city staff to find another way to reduce the $5.16 million shortfall in the preliminary $83.8 million 2013-14 general fund budget, which is used to pay for general operations of the city.</p><p>Council members rejected the four strategies the staff proposed to close the gap between revenue and expenses. The four plans call for taking a range of $2.8 million to $5.2 million from reserves for contingencies, which is money set aside for problems that arise, such as hurricanes. Three of the proposed strategies also call for taking money, ranging from $1.3 million to $2.4 million, from the fire and police 1/4-mill fund that is used to buy equipment. In addition, one of the four strategies calls for increasing a transfer of money from the sanitation department by an additional $250,000, bringing the total sanitation transfer to $1 million.</p><p>Council offered no direction other than to say it wants some police cars and a fire pumper truck that had been cut restored to the budget. That would reduce the transfer proposed to be used to balance the general fund budget.</p><p>The preliminary general fund budget presented at Tuesday's council workshop meeting shows flat revenues. Property values in the city are down 0.25 percent.</p><p>"We had double digits for several years," said Cindy Kelley, the city's deputy director of budget and finance. "It's getting better."</p><p>The city's total revenues are projected to be $61.81 million and total expenses $66.97 million, leaving a $5.16 million shortfall. The estimated $22 million cash balance brings the total general fund budget to $83.8 million.</p><p>"About half our increase is salaries and benefits," Kelley said Wednesday about expenses.</p><p>The General Employees Pension Plan obligations have increased to 53 percent of payroll, up from the current 42 percent of payroll, Kelley said.</p><p>Police Chief Greg Graham told the council that his fleet of vehicles is aging and said he recently went out on a shift and drove an older car.</p><p>"It scared the hell out of me," Graham said.</p><p>Money that was supposed to be set aside for emergency vehicles in the past has been tapped in recent years to balance the general fund.</p><p>"How much do you invest in public services versus public safety?" asked Councilman Daniel Owen, referring to choosing between funding services such as trash pickup or public safety, like police and fire.</p><p>Councilwoman Suzy Heinbockel expressed concern about deteriorating emergency equipment.</p><p>"We have put off, put off and put off," she said.</p><p>Staff had cut four police cars and one fire pumper from the budget in order to close the general fund deficit. An additional 13 police cars, two light fire rescue trucks and one fire pumper were approved, however.</p><p>"In essence, we now gave them everything they asked for," Kelley said.</p><p>Built into the proposed general fund budget are a small number of fee increases and a one-time payout of $504,340 in bonuses for employees. Full-time employees each will receive $500 and part-time employees will receive $250. The money will come from a $593,671 reduction in insurance premiums. After the bonuses are paid, there still would be an $89,331 overall savings in insurance premiums.</p><p>"That's why we went ahead and did that — give the employees a little bit of something," Kelley said.</p><p>Two full-time employees will be added to the general fund budget and one part-time employee will be upgraded to full time. They are in addition to the 11 other full-time employees and seven part-time employees being added to the total budget.</p><p>City Manager Matthew Brower told the council he is down 12 employees due to attrition.</p><p>Staff will present a revised general fund budget on Tuesday.</p><p><i>Contact Susan Latham Carr at 867-4156 or susan.carr@starbanner.com.</i></p>